Letters

Safe deposits for our future

Attempts at encouraging banks to take over each other, dispensing with competition regulations, are neither desirable nor workable (HBOS rescue in jeopardy, October 1). They are not workable because they only prolong the uncertainty about the viability of the banking system. What is needed is a swift decline in share prices for banks and that is more likely to happen if government stops making half-hearted gestures towards the rescue of troubled banks, so that a large segment of the banking industry can be nationalised quickly at low cost. The loan books could then be stripped of potentially non-performing assets, liabilities taken over by government, for the restructured banks to be returned to the private sector with transparent accounting rules for ascertaining the riskiness of assets.

Trust in the banking system would be restored. Proceeds from the privatisation of banks nationalised at a rock-bottom price may well yield surpluses to cover part, if not all, of the liabilities taken over by the taxpayer. Neither the public nor the banks trust the publicly available information about risks that banks have taken. If that uncertainty is removed, bank shares may begin to trade at a higher price. SP ChakravartyBangor, Gwynedd

Will Hutton advocates we slash interest rates, cut taxes and increase public spending at the same time (Comment, October 1). If we did as Hutton suggests, the economy would be in such a mess we wouldn't be allowed to join the euro. The rest of Europe wouldn't bail us out in this way.

Admittedly, in following Hutton's plan, we could (briefly) find ourselves on par with the euro while sterling collapsed as a result of unconstrained inflation and huge withdrawals of overseas funds from the UK banking system.William AllenStorrington, West Sussex

There is no doubt that bank deregulation is a Tory thing (Letters, October 1). Margaret Thatcher abolished exchange control and created the Big Bang of deregulation. At least £80bn instantly deserted this country and took refuge in offshore havens never to return. Thatcher personally intervened with bank boards and urged them to invest abroad. They did and accumulated billions of bad debts which had to be subsequently written off.

Why have none of the political parties advocated the abolition of the offshore centres that siphon off £400bn annually of tax revenue from the UK economy? This would be more than enough to allow the government to reduce taxes across the board. Arthur O'ConnorSunbury, Thames

I am an Irish citizen and I am shocked that our nation is now exposed to €400bn plus of bank liabilities, that the banks themselves chose to take on (Report, October 1). I am shocked that this has been done with no democratic debate beforehand and without the terms and conditions being settled and made public. Are we going to be guaranteeing the banks' profits too? Will the executives still get their bonuses?

This guarantee represents an exposure of approximately €100,000 for every person in the state. It will also affect the credit rating, and therefore the cost, of Irish government bonds, adding another burden to the Irish citizen.Tom ConroyDublin, Ireland

It would be unwise to rely solely on Keynes for monetary policy insights (Bring back Keynes, September 30). Keynes rejected the ideas of Silvio Gesell, but wasn't the Austrian economist correct when he advocated controlling land and money? Can't the source of the current financial crisis be summarised as uncontrolled money piling into an uncontrolled land market?Carol WilcoxLabour Land Campaign

I have received a letter from the Halifax this morning that opens with the sentence: "Nobody can be absolutely certain about the twists and turns of the financial world." Too true. Doug SimpsonHarrogate, North Yorkshire